Retiring early -- possibility or pipe dream?

2. Give yourself an income
Early retirees have to take special care not
to whittle away too much of their nest egg
in the early phase of retirement. One way
to insulate savings and establish a steady
income stream is to purchase an annuity.

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"Annuities can help anchor
your portfolio and bring back some of that
peace of mind," says Weil, who recommends
allocating roughly 10 percent of one's total
investment pool to an immediate
annuity for the stability it provides,
but keep the remaining assets invested in
securities that meet or beat the inflation
rate.

3. Adjust asset allocation
This is especially important for early retirees.
Weil's model portfolio: 70 percent divided
between domestic and foreign stocks, 10 percent
in cash, 10 percent in immediate annuities
and 10 percent in bonds. Also, view the portfolio
recommendations in Bankrate's story on asset
allocation.

4. Get health insurance
Even the most diligent savers with more than
enough money to retire early may find themselves
unable to leave the work force if they can't find
affordable health insurance. Buying a
high-deductible health insurance policy can
help lower your premiums and many professional
associations offer better benefits for the
money.

6. Make sure you really want to retire
While thoughts of early retirement may sustain you through those endless meetings with the boss, thinking it and doing it are two different things.

"Not everyone likes retirement, especially sharp, trained professionals," says Rose. "You can only read so many newspapers and drink so much coffee before you get bored. Plus, a lot of professionals associate their identity with their work so they sometimes feel they've lost their sense of purpose."

Conversely, many of Rose's clients
who have quit working while still in their
50s have the opposite experience. "They
travel a lot, play golf and visit the grandkids,"
he says. "I can never tell which ones
are going to enjoy it and which ones are not."

For his part, Warner says the unexpected financial setbacks they experienced have forced him and his wife to reduce their discretionary spending, which limits their ability to travel. But, he adds, he has no plans to return to work.

Since retirement, Warner has
begun volunteering as an accountant for his
church and, with his wife, has become certified
as a master gardener to help teach classes
for the county.

They also attend exercise classes twice a week at the local university, where sports medicine students get hands-on training. "We love retirement," he says. "I don't know when I would have time to work with all the activities we've got."